Invest and Trade Profitably with Jon Johnson

Weekender for 3/12

1. Market Summary

Are Bank Runs Starting?

  • Stocks jump on higher initial claims, then reverse sharply on bank issues.
  • Are bank runs starting or were Thursday’s bank stories just one-offs?
  • Techs, semiconductors still remarkably resilient.
  • Stocks bounce on jobless claims data. If jobs are weaker, will they bounce again, and will it be enough to overcome the bank worries?

Solid low to high action from the premarket turned negative futures to positive after initial claims came in higher (211,000 vs 198,000 expected), breaking a string of lower and lower claims. Apparently, based upon one-week higher, the conclusion was the employment slowdown has started.

That boost carried over into the open and the first hour with stocks posting solid gains. They surged, tested, then surged again — definitely had the look that stocks were set to rally off those Wednesday doji. Chips were leading, along with big Nasdaq names, industrial metals, software — the same groups we have talked about.

NOTE: The figures and information above are from the 3/9 report.

Watch the Investment House Video For This Week Here!

NOTE: The video is from the 3/8 report.

2. Targets Hit

Technical Trader Alert:

Terex Corporation (NYSE: TEX): TEX showed market-defying strength as it worked higher up the 10-day exponential moving average (EMA). Okay, that is a bit of a stretch — it was quite strong and steady, and in this market that has shown such volatility, strong and steady is indeed somewhat market-defying.

TEX formed a shallow base at the 50-day moving average (MA) in December 2022 and into late January 2023.  It moved steadily higher through resistance, but showed no real volume boost as TEX moved into early February.

TEX then tested that move, working laterally to mid-month. Then TEX showed volume as it resumed the breakout move.  We issued the alert to enter the play with April $55 call options asking $3.80. TEX jumped higher for two sessions then again moved laterally, consolidating the gain for six sessions — strong and steady, but it takes its time.  TEX ended the month with a nice new break higher on strong trade, and that move carried TEX up to some potential resistance at $60. TEX spent four sessions trying to get through that resistance.

On Monday, March 6, TEX broke to a higher rally high … then it stalled and started to fade. After this move and its trouble getting through resistance, this action showed it was time to bank profits. We issued the alert to sell with the options bidding for $5.80 and a solid enough 52% gain.

Not huge, but TEX was played because of its steady support giving it steady moves.  We were able to bank a nice gain in a volatile market without needing to have the bottle of Pepto-Bismol as the desk.

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3. Covered Call Options Play

Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI) — Ollie’s Bargain Outlet Holdings Inc. is currently trading at $55.56. The April 21 $40 Calls (PGNY20230421C00040000) are trading at $2.95. That provides a return of about 10% if OLLI is above $40 by the expiration.

Learn more about our Covered Call Tables here!

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